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2015 (5) TMI 1031 - AT - Income TaxAssessment framed under section 153A - Whether the issue of notice under section 143(2) of the income-tax Act is mandatory for finalization of assessment under section 153A? - Held that - Non-issuance of notice under sub-section (2) of section of the Act is not mandatory. As a consequence, the second question is also answered against the assessee, Assessment proceedings u/s 153A cannot be held as null and void, for non-issuance of notice u/s 143(2) of the Act, as this provision is not attracted to proceedings u/s 153A of the Act.
Issues Involved:
1. Whether non-issuance of the notice as provided in Sub-section (2) to Section 143 of the I.T. Act in the case of assessment framed under section 153A, in consequence of search under section 132, is merely an irregularity and the same is curable. 2. Whether failure on the part of the Assessing Officer to issue notice to the assessee as per provisions of sub-section (2) to section 143 shall render the entire assessment framed under section 153A of the Act as null and void. 3. Whether it is necessary to issue notice under section 143(2) to acquire jurisdiction in proceedings under section 153A of the I.T. Act. 4. Whether the Hon'ble President / Third Member is competent to reframe the points of difference to bring to focus the issues that emerge out of the orders passed by the respective Members of the Division Bench. 5. Whether the learned CIT-DR is authorized to request the Hon'ble President for reframing of question to bring into focus the points of difference emerging out of the orders passed by the respective Members of the Division Bench. Issue-wise Detailed Analysis: 1. Non-issuance of Notice under Section 143(2) in Section 153A Proceedings: The primary issue is whether the non-issuance of notice under section 143(2) in the context of section 153A assessments is merely an irregularity and if it is curable. The learned Counsel for the assessee argued that the issuance of such notice is a condition precedent based on various judicial precedents, including those from the Supreme Court and jurisdictional High Courts. The Departmental Representative, however, contended that the legislative intent does not mandate such a notice under section 153A, referencing the Delhi High Court's decision in Ashok Chaddha v. ITO. 2. Failure to Issue Notice under Section 143(2) Rendering Assessment Null and Void: The second issue is whether the failure to issue notice under section 143(2) renders the entire assessment under section 153A null and void. The Counsel for the assessee cited the Supreme Court's decision in ACIT & Anr. v. Hotel Blue Moon, which held that the service of notice under section 143(2) is a prerequisite for assessments. The Departmental Representative argued that section 153A does not specifically require such notice, distinguishing it from sections 147 and 148, and relied on the Delhi High Court's ruling in Ashok Chaddha. 3. Necessity of Notice under Section 143(2) for Jurisdiction in Section 153A Proceedings: The third issue, raised by the Principal Commissioner of Income-tax (DR), questioned whether issuing notice under section 143(2) is necessary to acquire jurisdiction in section 153A proceedings. The learned Counsel for the assessee relied on precedents suggesting that such notice is mandatory for valid assessments. The Departmental Representative countered this by stating that section 153A does not explicitly require such notice, and the case is covered by the Delhi High Court's decision in Ashok Chaddha. 4. Competence of Hon'ble President / Third Member to Reframe Points of Difference: The preliminary issue was whether the Hon'ble President / Third Member is competent to reframe the points of difference to highlight emerging issues from the Division Bench's orders. The Third Member did not express an opinion on this issue, deeming it unnecessary for adjudication. 5. Authorization of CIT-DR to Request Reframing of Questions: The second preliminary issue was whether the learned CIT-DR is authorized to request the Hon'ble President for reframing questions to focus on points of difference from the Division Bench's orders. Again, the Third Member did not express an opinion on this issue, considering it unnecessary for adjudication. Conclusion: The Third Member concluded that non-issuance of notice under section 143(2) is not mandatory for section 153A proceedings. Consequently, the failure to issue such notice does not render the assessment null and void. The decision of the Delhi High Court in Ashok Chaddha was upheld, distinguishing it from other cases cited by the assessee. The Registry was directed to post the case before the appropriate Bench for passing further orders after hearing the parties.
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